Struggling Finding ARV

[Kyler Wright]

Hello, I am planning on investing in my local market which I have lived in my whole life and now attend college 30 minutes away. Due to me living here my whole life, I know the area, schools, and other variables pretty well. 

BUT, the market is quite small and I seem to be having issues finding Sold homes near properties I analyze. I'm not quite ready financially to take full action purchasing an investment but I try to analyze some properties on the MLS for practice and finding the ARV seems to be a struggle at times due to the lack of sold homes. I Also want to stay in this market because as I said before I am still in college and being able to see homes in person and drive through the market to look at them at ease is a positive factor I want to keep.

I plan on house hacking once I get back from my summer internship so this issue will also come into play if I were to try and slightly rehab the home while living in it. Not having an estimate on what the property will be worth will make me worried to try and slightly rehab the home and pull cash out in the future in fear that I'll put more into the property than I get out.

What would you all suggest when in a situation like this? Any response will help. Thank you!

[Kyler Wright]

Quote from @Jaycee Greene:

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Quote from @Kyler Wright:

Quote from @Jaycee Greene:

Quote from @Kyler Wright:

Quote from @Jaycee Greene:

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Quote from @Kyler Wright:

Quote from @Jaycee Greene:

Quote from @Kyler Wright:

Hello, I am planning on investing in my local market which I have lived in my whole life and now attend college 30 minutes away. Due to me living here my whole life, I know the area, schools, and other variables pretty well. 

BUT, the market is quite small and I seem to be having issues finding Sold homes near properties I analyze. I'm not quite ready financially to take full action purchasing an investment but I try to analyze some properties on the MLS for practice and finding the ARV seems to be a struggle at times due to the lack of sold homes. I Also want to stay in this market because as I said before I am still in college and being able to see homes in person and drive through the market to look at them at ease is a positive factor I want to keep.

I plan on house hacking once I get back from my summer internship so this issue will also come into play if I were to try and slightly rehab the home while living in it. Not having an estimate on what the property will be worth will make me worried to try and slightly rehab the home and pull cash out in the future in fear that I'll put more into the property than I get out.

What would you all suggest when in a situation like this? Any response will help. Thank you!

Hey @Kyler Wright, welcome to the BP Forum! What type of properties are you seeking, SFR or 2-4 MF? What is your price range/down payment amount? Are you looking for turn-key properties or something along the lines of a "fixer upper"?

Hello, Mr. Jaycee, thank you for your response! I am currently looking primarily at 2-4 unit homes. The median price range in my market, based on realtor.com is $209.5k, but I'm more focused on homes listed in the range of $100,000 - $160,000. Lastly, I am looking to find properties with simple cosmetic needs, such as newly painted walls, updated cabinetry, possibly replacing carpet with LVP, etc.   

 @Kyler Wright Are you looking in Oxford or Bham?

@Jaycee Greene The Oxford-Anniston Area, more so Anniston due to the cheaper home prices and a new county change starting in 2026. The change will allow homes inside of Calhoun County to choose which school their children attend inside of the county. I believe this will appreciate the homes in Anniston because they will no longer be forced to attend Anniston Middle and High School.

@Kyler Wright Got it, great! So, something like this, 1429 Marguerite Ave, Anniston, AL? 

@Jaycee Greene Yes sir exactly! I actually called the Agent on that property last week to hear more about it and maybe get some insight. I've also talked to Agent who listed the property on 910 & 912 E 15th St.

@Kyler Wright Great! So, for that E15th St property, what do you think the monthly rent would be in unit you would rent out? 

@Jaycee Greene After speaking with the Agent, I was informed that both units were being rented for $850/mo. One tenant is month-to-month and the other still has a few months left on their lease. My plan would be to assist the tenant paying month-to-month locate another place to rent so that I can live in their unit. I would then talk to the tenants in the other unit about renewing their lease. If this went according to plan then I would look for a roommate (a student a JSU) and have them pay $400-$500/mo for a room in my unit so that my PITI, CapX, and other factors would be covered possibly with cashflow.

I'm not sure what my mortgage would be on the home after utilizing a 203(b) or 203(k) loan so I don't know the amount of income I would need to have those things covered.

@Kyler Wright Have you received any interest rate quotes for either type of mortgage?

@Jaycee Greene No sir I have not. Would I need to get a pre-approval with the two loans to have this exact number? I assume that it would be around 6.25-6.6% based on interest rates for FHA Loans being lower than the average for conventional but I'm really not sure. Also, that's a pretty big range so I plan on running my numbers quite high until I have that exact number.

Also, If I were to get a pre-approval on the home, would that rate stay consistent with similar properties listed near the same price? Or, are there more factors that change the rate more dramatically?

 @Kyler Wright I'm not sure on the rate lock on the pre-approvals, but that's an easy question for a mortgage lender to answer. Even at 6.60%, I believe this deal pencils out for you. But I'm a little confused, what do you mean by "with the two loans"? 

@Jaycee Greene Sorry, I wasn't very clear on that. By two loans I was referring to the 203(b) and 203(k) but I see it would be more beneficial to see the property and make the decision on which one I would use so that I only have to go through one pre-approval process rather than trying to get a pre-approval for both. 

Also, do you think I could call a mortgage lender and without sending over any documentation have a quick conversation over the phone about my situation and they give me a better estimate on rates?

@Kyler Wright I'm not a house hack financing expert, but I believe the difference between the b and the k is one funds limited rehab and the other doesn't.

Yes, you should be able to call a mortgage lender and discuss your "plan" with any specifics. I suspect they'll be able to share things that you didn't think of as well. good luck. 

 @Jaycee Greene Thank you greatly for your time and information Mr. Greene! I very much appreciate you speaking with me and hope we can connect more in the future.